Treaty Document

Formal Title

Additional Protocol Between the United States of America and the Republic of Poland to the Treaty Between the United States of America and the Republic of Poland Concerning Business and Economic Relations of March 21, 1990, signed at Brussels on January 12, 2004.

A Senate treaty document provides the text of the treaty as transmitted to the Senate, as well as the transmittal letter from the President, the submittal letter from the Secretary of State, and accompanying papers.

Text of Treaty Document available as:

[Senate Treaty Document 108-22]
[From the U.S. Government Printing Office]
108th Congress Treaty Doc.
SENATE
2d Session 108-22
_______________________________________________________________________
ADDITIONAL PROTOCOL CONCERNING BUSINESS AND ECONOMIC RELATIONS WITH
POLAND
__________
MESSAGE
transmitting
THE PRESIDENT OF THE UNITED STATES
ADDITIONAL PROTOCOL BETWEEN THE UNITED STATES OF AMERICA AND THE
REPUBLIC OF POLAND TO THE TREATY BETWEEN THE UNITED STATES OF AMERICA
AND THE REPUBLIC OF POLAND CONCERNING BUSINESS AND ECONOMIC RELATIONS
OF MARCH 21, 1990, SIGNED AT BRUSSELS ON JANUARY 12, 2004
March 12, 2004.--The Protocol was read the first time, and together
with the accompanying papers, referred to the Committee on Foreign
Relations and ordered to be printed for the use of the Senate
LETTER OF TRANSMITTAL
----------
The White House, March 12, 2004.
To the Senate of the United States:
With a view to receiving the advice and consent of the
Senate to ratification, I transmit herewith the Additional
Protocol Between the United States of America and the Republic
of Poland to the Treaty Between the United States of America
and the Republic of Poland Concerning Business and Economic
Relations of March 21, 1990, signed at Brussels on January 12,
2004. I transmit also, for the information of the Senate, the
report of the Department of State with respect to this
Protocol.
I have already forwarded to the Senate similar Protocols
for Romania and Bulgaria and now forward simultaneously to the
Senate Protocols for the Czech Republic, Estonia, Latvia,
Lithuania, Poland, and the Slovak Republic. Each of these
Protocols is the result of an understanding the United States
reached with the European Commission and these six countries
that will join the European Union (EU) on May 1, 2004, as well
as with Bulgaria and Romania, which are expected to join the EU
in 2007.
The understanding is designed to preserve U.S. bilateral
investment treaties (BITS) with each of these countries after
their accession to the EU by establishing a framework
acceptable to the European Commission for avoiding or remedying
present and possible future incompatibilities between their BIT
obligations and their future obligations of EU membership. It
expresses the U.S. intent to amend the U.S. BITs, including the
BIT with Poland, in order to eliminate incompatibilities
between certain BIT obligations and EU law. It also establishes
a framework for addressing any future incompatibilities that
may arise as EU authority in the area of investment expands in
the future, and endorses the principle of protecting existing
U.S. investments from any future EU measures that may restrict
foreign investment in the EU.
The United States has long championed the benefits of an
open investment climate, both at home and abroad. It is the
policy of the United States to welcome market-driven foreign
investment and to permit capital to flow freely to seek its
highest return. This Protocol preserves the U.S. BIT with
Poland, with which the United States has an expanding
relationship, and the protections it affords U.S. investors
even after Poland joins the EU. Without it, the European
Commission would likely require Poland to terminate its U.S.
BIT upon accession because of existing and possible future
incompatibilities between our current BIT and EU law.
I recommend that the Senate consider this Protocol as soon
as possible, and give its advice and consent to ratification at
an early date.
George W. Bush.
LETTER OF SUBMITTAL
----------
Department of State,
January 22, 2004.
The President,
The White House.
The President: I have the honor to submit to you the
Additional Protocol Between the United States of America and
the Republic of Poland amending the Treaty Between the United
States of America and the Republic of Poland Concerning
Business and Economic Relations of March 21, 1990, signed at
Brussels on January 12, 2004. I recommend that this protocol be
transmitted to the Senate for its advice and consent to
ratification.
This protocol is the result of an understanding that the
United States reached with the European Commission and six
countries that will join the European Union (``EU'') on May 1,
2004 (the Czech Republic, Estonia, Latvia, Lithuania, Poland
and the Slovak Republic), as well as with Bulgaria and Romania,
which are expected to join the EU in 2007.
The understanding is designed to preserve our bilateral
investment treaties (``BITs'') with these countries after their
accession to the EU by establishing a framework for avoiding or
remedying present and possible future incompatibilities between
our BITs with these eight countries and their future
obligations of EU membership. In this regard, the understanding
expresses the U.S. intent to conclude substantively identical
amendments and formal interpretations of the BITs with each of
these eight countries.
In addition, the understanding establishes a framework for
addressing any future incompatibilities that may arise as
European Union authority in the area of investment expands and
evolves in the future. It endorses the principle of protecting
existing U.S. investments in these countries from any future EU
measures that may restrict foreign investment in the EU, and
also clarifies certain protections afforded to U.S. investments
in individual member states of the EU under the Treaty
Establishing the European Community (``EC Treaty'').
Finally, the understanding calls for the United States and
each BIT partner to interpret, through an exchange of letters,
two BIT provisions: (1) the right of each BIT Party to take
measures necessary for the protection of its own essential
security interests, and (2) the BIT prohibition on performance
requirements.
Both interpretations were undertaken at the request of the
European Commission to confirm the mutual understanding of the
United States and Poland in the context of EU enlargement. For
example, the interpretation of the BIT provision on essential
security interests confirms that, for Poland, these interests
may include interests deriving from Poland's membership in the
EU. As concerns the BIT prohibition on performance
requirements, many U.S. BITs include a provision explicitly
stating that the prohibition on performance requirements does
not extend to conditions for the receipt or continued receipt
of an advantage. The interpretation relating to performance
requirements makes this explicit with respect to the U.S.-
Poland BIT. The two interpretations are enclosed for the
information of the Senate.
Investment by the United States has played an important
role in the economic transformation of these eight countries,
and the U.S. BITs have afforded important protections to U.S.
investors. Prior to acceding to the EU, however, the European
Commission has required that these countries terminate any
international treaty containing incompatibilities with EU law.
Without the understanding and the steps contemplated therein,
including the specific amendments in this protocol, these
countries would be required to terminate their U.S. BITs and
the great majorityof protections these treaties afford U.S.
investors. Therefore, the understanding, together with the
interpretations and specific amendments in the protocol, will preserve
the benefits of these treaties and provide important additional
protections for U.S. investors as the EU continues to evolve.
THE U.S.-POLAND PROTOCOL
The United States champions EU enlargement and, at the same
time, intends that this BIT will continue to mutually benefit
U.S. and Polish investors. By undertaking these amendments of
the BIT with Poland, which would be brought into force just
prior to its accession, incompatibilities between BIT
protections and EU law are eliminated, and any future problems
in this respect are addressed through a framework for
consultations. This action preserves our BIT with Poland after
its accession to the EU, and is consistent with the policy of
the United States to welcome market-driven foreign investment
and to permit capital to flow freely to seek its highest
return. Poland is one of the newly democratized countries in
Europe transitioning to a market economy, and foreign direct
investment into Poland is very much in both our countries'
interests. Protection for investors facilitates investment
activity, and thus directly supports U.S. policy objectives.
The principal substantive articles of the protocol provide
as follows:
Article I: that the article of the BIT prohibiting
performance requirements does not limit Poland's
ability to impose, as necessary under EU law, certain
kinds of performance requirements in the agricultural
and audiovisual sectors;
Article II: that the terms of the free trade area/
customs union exception of the BIT shall apply, without
limitation, to all of a Party's obligations stemming
from its membership in an economic integration
agreement that includes a free trade area or customs
union, such as the EU;
Article III: that the BIT Parties will consult
promptly whenever either Party believes that steps are
necessary to assure compatibility between the BIT and
the EC Treaty;
Article IV: that, in certain specified sectors or
matters, Poland may take a reservation against the
national treatment and most-favored-nation treatment
obligations of the BIT, provided such reservation is
necessary to meet Poland's obligations under EU law,
and subject to the following exception;
that, notwithstanding any such new
reservation, existing U.S. investments in
Poland shall remain protected under the
national treatment and most-favored-nation
treatment obligations of the BIT for at least
10 years from the date of the relevant EU law
necessitating the reservation; and finally,
that the United States reserves the right to
make or maintain limited exceptions to the
national treatment obligation in two new
sectors or matters, fisheries and subsidies,
and to the most-favored-nation treatment
obligation in one new sector, fisheries.
With respect to future developments in EU law, the United
States recognizes that the possibility exists that these
amendments may not suffice to ensure compatibility, and that
consultations would be necessary to avoid or eliminate any
incompatibilities that may arise. As noted above, the United
States and Poland expressly agree to such consultations in the
protocol.
I support this protocol to the U.S. BIT with Poland, and I
favor its transmission to the Senate at an early date.
Respectfully submitted.
Colin L. Powell.
Enclosures: As stated.